Posts Tagged Bank

Congress is getting tough with the banks over the robo-signing scandal where banks may be foreclosing on some homes they don’t even own, and never did the proper due diligence to make sure they do. Sometimes two banks are even foreclosing on the same property.

Utah ranked 6th in foreclosures nationwide

According to RealtyTrac Inc., Utah ranked sixth nationally in foreclosures during the third quarter of 2010. According to their figures 1 in every 88 homes in Utah were in some state of the foreclosure process during this time compared to the national average of 1 in every 129 homes.

But it’s not all that bleak. Utah traditionally lags behind the rest of the nation economically so we’re now at the same point everywhere else was over a year ago, and nationally the foreclosure rate was down 21% from the third quarter of 2009. So it’s getting better all the way around.

Bought a foreclosure? Title insurance could save you

With the current allegations of foreclosure fraud on the bank and loan servicer levels can you be really sure you own that sweet deal of a foreclosure you just bought?

The issue at hand here is “who really owns the home you just bought?” It turns-out that in some cases banks have committed fraud in the foreclosure process by manufacturing missing documents needed to foreclose on a home. Documents like the original Note and other missing loan documents, forging peoples signatures in the process.

Loan servicing rights can change companies several times throughout a loan’s life. Every time it does a hard copy of the original Note (you have a copy in your closing documents the title company gave you) is supposed to go to the new servicer.

It rarely did.

Now, banks are unsure who really owns the loan and thus who has the right to foreclose on the property.

Although I’m very outspoken about the reasons behind the current economic crises and foreclosures, I do believe that if someone is in violation of their contract with the bank to repay the loan that the bank has the right to foreclose on them. But, this has to be done with due process of law. The XIV Amendment insures us of this right. This is a whole other topic, though.

The point here is, remember that title insurance policy that was part of your closing costs? That $600 to $1,500 charge? Well that policy is what will protect your right to the house you just bought. Title insurance insures past events on the property. So even if the title wasn’t clear with a previous lender at the time you bought the house, you’re not going to lose your home.

All lenders require a title insurance policy be purchased when you buy or refinance a home for that reason. It protects their interest just as it protects yours. But if you bought the property with cash and didn’t opt to pay for title insurance, than you may have reason to be concerned because you may not own the property because the bank you bought it from may not have owned it and thus had the right to sell it to you, and there is no insurance to pay-out damages to the rightful holder of the Note.

The moral of the story? Title insurance is cheap protection on your property. Always get it.